When Should Your Special Needs Trust Be Reviewed with a Virginia Special Needs Planning Attorney?

Nothing lasts forever. That smiling baby becomes a child, who becomes a teenager (horrible), who becomes an adult. You change too. You won’t always be there for your child with special needs. You may have already created a Special Needs Trust (SNT) to set aside money for this inevitable possibly and make transitions as easy as possible for your child. But, the creation of your Special Needs Trust should not be a “one and done” experience. In fact, it will likely need to change as your life and the law changes through the years.

A Special Needs Trust is a snapshot of your finances and life at a particular moment in time, but things may not always stay the same. If you experience a major life change, you’ll want your SNT to reflect those new circumstances. Here are some indications that it may be time to have your SNT reviewed by a Virginia Special Needs Planning Attorney.

Your finances change. Down markets, unexpected expenses, and property loss can definitely limit the amount of resources available to fund your Special Needs Trust. Yet, promotions, property values surging, and other windfalls can mean not just more valuable assets to put in the SNT, but new ones to consider allocating for your child’s care.

Your child’s needs change. Aside from your child’s disability progressing, needs can change in other ways. For example, your child may have started a new type of therapy that’s proving very beneficial, and you want to make sure that there are funds to cover that therapy in the future.

Your health changes. While you’d like to be there for your child for eternity, that’s not possible, and even the healthiest of adults may fall ill, sometimes without warning. If your health has recently taken a turn, it’s wise to contact your special needs planning attorney to discuss these changes and how they may affect your plan.

Families change. If you created your SNT a few years ago there may have been changes in the family since then such as births, deaths, and marriages. You may want to change your asset allocations to accommodate these changes, not only for the SNT, but for all your estate planning.

If anything has changed since you last had your child’s Special Needs Trust reviewed, contact Virginia Special Needs Planning Attorney Sheri R. Abrams to schedule an appointment. Contact us at (571) 328-5795.

I read something recently that I found shocking. A study set to be published next month in the Journal of Intellectual and Developmental Disabilities reports that only 3.6% of parents surveyed who have children with intellectual and developmental disabilities have established legal guardianship, done Estate Planning (such as a Special Needs Trust) or have a plan for housing for their child in the event the child outlives them.

Thanks to improvements in healthcare, more and more individuals with disabilities are outliving their parents. So, why aren’t parents taking steps to avoid a crisis situation regarding their child’s future? Sixty-one percent of the parents who hadn’t planned indicated that cost, lack of time and stress are the primary barriers to planning.

Believe me, I understand that.

Oftentimes parents are consumed with day-to-day activities for their child and there are just so many hours in the day. The thing is, I’ve seen the other side of the situation far too many times. When the parents of disabled individuals pass, there is often chaos and confusion. This happens even if there is a sibling willing to step in and take over care of their brother and sister. Without the proper legal documentation in place, there can be a period of turmoil while the court process takes place.

One other interesting fact from the study was that 39% of respondents reported a lack of information as a barrier to future planning. Again, this is understandable. While there are reputable sources to be found online, there is a lot of confusion about special needs planning.

If you are reading this blog and searching for reliable information about planning for your child with disabilities, you are in the right place. Special needs planning is one of my key practice areas and I have a particular passion around educating the public. If you’d like assistance, simply call our office at (571) 328-5795 and schedule an appointment.. We’d be happy to answer your questions and help you map out a plan that ensures your child will be protected through all of life’s transitions.

Military families who are planning for a child with special needs have historically faced a number of difficulties when planning for their future financial stability. Previously, military families faced the challenge of being unable to assign survivor benefits to their child with special needs because the payments could potentially affect their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI).

Fortunately, changes made in 2014 under the Disabled Military Child Protection Act now allow military parents to provide survivor benefits to a disabled child via a First Party Special Needs Trust rather than putting the money into the child’s name. The child will still benefit from the funds in the Trust, but because the funds are not in the name of the child, they will not be considered when determining eligibility for government programs. The military member can designate up to 55% of their retirement pay to eligible children or spouses. .

Before designating survivor benefits to a disabled loved one, families need to carefully consider the long-term impact. When considering the use of a First Party Special Needs Trust for a survivor benefit plan, families should consult with a knowledgeable Special Needs Planning Attorney to make sure that the correct type of Trust is used and that it is in compliance with the law.

We’ve worked with hundreds of veterans and military families in Virginia and also have extensive experience working with Special Needs Trusts, so we are ideally suited to help you. If you would like to learn more about using military survivor benefits to secure your special needs child’s financial future, call us today at (571) 328-5795.

It’s devastating when a child becomes disabled due to medical malpractice or personal injury, and many families seek to recover from those whose negligence harmed their child. Lawsuits can take years, and take an emotional and psychological toll on the families involved. Should the family prevail, getting a verdict in their favor can be a godsend that allows them to recover from financial difficulties due to the child’s medical needs. However, even after a settlement or verdict, there is more to do.

Your child may still be qualified for public benefits.

A settlement or verdict may not always cover a disabled child’s needs, but with careful planning, any lack of funds can be covered by other sources, such as public benefits. If your child is unable to work, he or she may still qualify for some benefits, like Supplemental Security Income (SSI) and Medicaid, even if they receive money from a settlement or verdict.

Consider creating a Special Needs Trust.

Special Needs Trusts are specifically created to benefit a person with special needs and cover not only their medical expenses but their personal ones. Placing a settlement or verdict in a Special Needs Trust will preserve the child’s eligibility for public benefits like SSI and Medicaid, since the assets in a Special Needs Trust are not counted as belonging to the child.

Special Needs Trusts also shield the assets in the Trust from being misused since a trustee is named to ensure that the money is protected and used appropriately.

Winning a medical malpractice or personal injury lawsuit is a hard-fought and hard-won victory, and it can be eclipsed by the new task of figuring out how to handle the money received. Creating a Special Needs Trust can help you create long-lasting financial security for your child with disabilities. Virginia Special Needs Planning Attorney Sheri Abrams can draft such a Special Needs Trust and help you create a solid plan for the future. For help getting started, contact our office at (571) 328-5795 to schedule an appointment.

I have been asked——: “Can I use an online template or do-it-yourself service to create my child’s Special Needs Trust?”

A Special Needs Trust is a very complex legal tool that rarely works as a “one-size-fits-all” solution. I’d venture to say that the majority of online templates or DIY software programs that create Special Needs Trusts are not sufficient for most families and would cause many intended consequences.

A DIY program can’t understand the complexities of your family or your child’s unique needs. It also won’t tell you what you are MISSING or that could hurt your child when you are no longer around to protect him or her.

Not to mention, laws vary from state to state and eligibility for programs that your child may depend on are also complex and difficult to account for on a generic, “one-size-fits-all” document.

For example, the eligibility rules for Medicaid are different from those for Supplemental Security Income (SSI) and both of those are different from Section 8 housing. Many of the decisions made by trust administrator can have devastating consequences for the individual with special needs and their ability to access critical government programs.

Further, without having detailed knowledge, families (and even some inexperienced lawyers!) make the mistake of putting a “Medicaid pay-back” provision into the Trust rather than allowing the remainder of the Trust to go to others upon the death of the individual with special needs. While Medicaid pay-back provisions are required in some types of Special Needs Trusts, an attorney who knows the difference can save your family thousands of dollars, or more.

So, while it is possible to create a Special Needs Trust using an online template, it is not likely to produce the best results for your child or your family. Always seek the advice of a qualified Special Needs Trust Attorney who understands which is the best Special Needs Trust and how the eligibility for the government programs your child depends on will be impacted.

If you’d like to schedule an appointment to get started, call the Law Office of Sheri R. Abrams at (571) 328-5795 today.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Because of a disability, a person receiving Supplemental Security Income (SSI) may not have worked long enough to qualify for Social Security Disability Insurance (SSDI) benefits on their own work record. You might assume, therefore, that this person can never receive SSDI benefits in the future. But this is not always the case. In fact, many people who receive SSI benefits and who became disabled before age 22 can switch to a form of SSDI benefits when one of their parents retires, becomes disabled or passes away.

one of their parents paid into the Social Security system for the required number of quarters; and…

that parent dies, retires or becomes disabled.

When the parent retires or becomes disabled, the child will receive 50 percent of the parent’s Social Security benefit, and if the parent dies the payment is increased to 75 percent of the parent’s benefit. This additional benefit causes no reduction in the parent’s Social Security benefit.

Under this program the disabled adult child is only able to draw DAC benefits from one parent at a time—-this would be the higher amount.

To receive this benefit the disabled adult child must be single or married to another person who is also receiving DAC benefits.

When a person starts receiving an SSDI payment, those additional funds will normally cause the person to lose their SSI benefits if the amount that they receive from their parent’s work record is greater than their current SSI benefit amount.

Fortunately, under something called the “Pickle Amendment” the receipt of additional SSDI funds does not cause the disabled adult child to lose their Medicaid eligibility that would normally result from a loss of SSI benefits. In addition, after the disabled adult child receives two years of SSDI benefits, they will also begin to receive Medicare benefits.

It is important in order to ensure receipt of the DAC benefits that the parent informs Social Security that they have a disabled child when they apply for Social Security for themselves and have someone in the family report when the parent passes away.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Government programs are meant to provide assistance to our citizens. However, even programs that can mean the difference between life and death, such as Medicaid and Supplemental Security Income (SSI), can have their budgets cut, benefits reduced, qualifications tightened, or they can be eliminated entirely. These programs are basically left to the whims of Congress. That is one of the many reasons I encourage parents of children with special needs to have back up plans, so that there are always funds available to supplement, or replace, any benefits they are currently receiving.

However, your special needs plan must accomplish this goal legally, and in the right way. For example, due to your child’s health issues, Medicaid may be vital. You know that you need a plan to ensure your child is taken care of when you are no longer around someday. You attempt to accomplish this goal by setting up a will that leaves your estate to your child with disabilities when you pass away. While that would indeed help your child financially, it would also backfire by causing the child to become ineligible for Medicaid and the health care benefits that he or she so desperately relies on. While one problem would be solved by this strategy, a different situation would be made much, much worse.

Fortunately, you do not have to disinherit your child to achieve ALL of your planning goals. After evaluating your unique situation, a special needs planning attorney may advise you to set up a Special Needs Trust. Money or assets held in a Special Needs Trust are not technically in your child’s name, and therefore do not could toward eligibility for government benefits. Using this legal tool, your child could enjoy the funds in the trust, without the fear of losing Medicaid or SSI.

Most parents want their children to have access to more than just the basic needs that are provided by Medicaid and SSI. They deserve recreation, transportation, proper dental care, companionship and much more. Having funds in a Special Needs Trust allows them to have the financial means to pay for these things. Plus, it gives them an added cushion so that if the programs on which your child depends is reduced or cut out completely, they’ll still be alright.

If you would like to talk about setting up a Special Needs Trust as part of a plan that meets the unique circumstances that your family faces, call the Law Office of Sheri R. Abrams at (571) 328-5795 to set up an appointment. .

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

The Achieving a Better Life Experience (ABLE) Act, which was created by Congress in 2014, allows people with disabilities and their families to save up to $100,000 in accounts for the benefit of a disabled person. The funds can be saved without jeopardizing the individual’s eligibility for Medicaid, Supplemental Security Income (SSI) and other government benefits. ABLE accounts may be opened by anyone with a disability as long as the disability began before the person turned 26.

Starting in 2018, the amount of money that can be deposited in an ABLE account per year without jeopardizing public benefits will rise from $14,000 to $15,000. The amount that can be deposited in an ABLE account is tied to the federal gift tax exclusion, which has also risen to $15,000.

Other changes to the program in 2018 include the following:

If you have an ABLE account and you work, you can put up to an extra $12,060 of your earnings into your account (on top of the regular $15,000 that is allowed). The $12,060 must be from your own earnings – it cannot be contributions from others or money you get from benefits or other unearned income.

Note: This means that if you earn $12,060 or more, you could have a total of up to $27,060 go into your ABLE account in a year. If you earn less than $12,060, the amount you could contribute would be lower.

Money can be rolled over tax-free from a regular 529 college savings plan to an ABLE account. That means that money which hasn’t been or won’t be used for college can instead be used for expenses that are approved for usage from an ABLE account.

If you have an account, youhave to make sure that too much money isn’t contributed into your account (even if it is other people making the deposits).

Setting up an ABLE account is often a solid way to save money for future expenses for an individual with disabilities. As with most federal or state programs, there are intricacies in the rules that should be understood prior to establishing an account. I encourage you to seek the assistance of a qualified special needs attorney to ensure that you understand the process before tying up your funds.

If you would like to speak to an attorney about the creation of an ABLE Account or to create an ABLE account in conjunction with a Special Needs Trust for your disabled loved one, please contact the Law Office of Sheri R. Abrams at (571) 328-5795 to schedule a consultation.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

The documentation that you create with your Virginia Special Needs Planning lawyer should be quite detailed and will take an incredible amount into consideration, but it will likely not cover every possible concern or wish you may have for your child’s future care. For that purpose, many parents work with their lawyer to create a Letter of Intent.

The Letter of Intent is more along the lines of a personal letter, rather than being a more formal legal document. It is used to supplement the Special Needs Trust in order to provide additional information.

Uses for the Letter of Intent

Parents often use it to address wishes that they have which don’t really fall under the purview of legal documents.

This document is also useful for addressing information about your child that is subject to change. While various other Special Needs Planning documents tend to be more static, the Letter of Intent can be changed out as the information in it needs to be updated.

Finally, a Letter of Intent is used to discuss topics that are just too lengthy to include in the Special Needs Trust.

The letter is typically addressed to the people who will be caring for your child once you are unable to fulfill that role. When the time comes, this Letter of Intent should be given to your child’s caregivers, as well as with the trustee. They can use the letter to help interpret your desires and to help follow through on the wishes you have for your child.

Families with disabled loved ones have had to walk a very fine line for many years. There is often a delicate balance between providing their family member with the most comfortable life possible, while also ensuring that extra assets or income don’t jeopardize their loved one’s eligibility to receive essential government benefits like Medicaid and Supplemental Security Income (SSI).

For years, the most effective way to achieve this balance was to set up a Special Needs Trust. But, in 2014, the federal Achieving a Better Life Experience (ABLE) Act created Internal Revenue Code Section 529A, which authorizes each State to offer tax-advantaged savings accounts for the disabled.

The plan works similarly to Section 529 college savings plans. The ABLE Act allows family members and others to make cash contributions to a qualified beneficiary’s ABLE account. The annual contribution amount is limited to the federal gift tax annual exclusion amount which is currently will be increasing to $15,000 in 2018.

The account grows tax-free and earnings may be withdrawn tax-free as long as they are used to pay “qualified disability expenses.” Qualified disability expenses include health care, education, housing, transportation, employment training, assistive technology, personal support services, financial management or legal services.

In most cases, an ABLE account won’t affect the beneficiary’s eligibility for Medicaid and SSI. However, distributions from an ABLE account used to pay housing expenses are countable assets. Also, if the balance of the ABLE account grows beyond $100,000, eligibility for SSI is suspended until the balance is brought below that threshold.

At this point, you may be wondering which would be better for your situation…or perhaps if you need BOTH tools to get the most out of your special needs plan. It’s really best to seek the advice of a qualified Special Needs Lawyer to discuss your unique circumstances. But, here’s a quick comparison to help guide you.

Availability

ABLE accounts are available only if your home state offers them or contracts with another state to make them available. Luckily, Virginia does offer them. In fact, Virginia was the first state to offer ABLE Accounts in 2015.

Age Restrictions

As previously stated, ABLE account beneficiaries must have become disabled before age 26. There are no age restrictions for Third Party Special Needs Trusts.

Qualified Expenses

ABLE accounts can be used to pay only specific types of expenses. Special Needs Trusts may be used to pay for “quality of life” expenses such as travel, recreation, entertainment and hobbies.

Taxes

An ABLE account’s earnings and qualified distributions are tax-free. A Special Needs Trust’s earnings are taxable.

There are many other considerations to examine that may impact your choice, so it is best to work with an experienced Special Needs Trust Lawyer who can help guide you based on you and your loved one’s unique circumstances. If you’d like assistance getting started, we invite you to contact the Law Office of Sheri R. Abrams at (571) 328-5795 to schedule an appointment.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

We aim to lead in each practice and area of law we work in. Coming from in-depth understanding of the law and the industry, capitalizing on extensive experience, we provide hands-on advice that speaks the language of our client’s business and/or legal issue.